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Selling your principal place of residence, selling your home, contributions, superannuation

Downsizer contributions – tips, tricks and benefits

This week, our listener Alice has sent us a question about downsizer contributions. She is 60 and her partner is 50, and she’d like to know how selling their primary place of residence (PPR) will affect their contribution limits, and the impacts of their age.

Downsizer contributions are a great way to boost your super balance without affecting your contribution limits. In fact, you can contribute up to $300,000 per person from the sale proceeds of your home. However, you need to meet some eligibility criteria first, and do things in a specific order.

Rules / eligibility:

  • You must be at least 55.
  • You must have owned the property for at least ten years.
    • If selling as a couple, it’s not a requirement that both spouses are on the property title (provided the spouse who was not on the title meets all other requirements).
  • The property must be located in Australia and not a caravan, other mobile home, or house boat.
  • You would be exempt or partially except from capital gains tax (CGT) under the main residence exemption.
  • You must make the contribution within 90 days of the sale.
  • You have not made a downsizer contribution in the past.
  • You must fill in the official ATO Downsizer Contributions form before or at the time of making the contribution.

You can still make non-concessional contributions, currently up to $110,000 a year (2023/24 financial year), as well as concessional contributions up to $27,500 a year.

For a couple who meet all eligibility criteria, this means you could contribute up to $600,000 into super without .

In Alice’s case, she would be able to make the contribution given her age, but her partner would not, as he is not yet 55.

While there are many requirements to meet, this is a great opportunity to boost your super without affecting your contribution caps. As it can be tricky to navigate the steps in the correct order, as always, we recommend seeing a financial adviser.